Transcript An introduction to PPS leases under the Personal Property

An introduction to PPS Leases under the
Personal Property Securities Act 2009 (Cth)
March 2014
AUSTRALIA BELGIUM CHINA FRANCE GERMANY HONG KONG SAR INDONESIA (ASSOCIATED OFFICE) ITALY JAPAN
PAPUA NEW GUINEA SINGAPORE SPAIN SWEDEN UNITED ARAB EMIRATES UNITED KINGDOM UNITED STATES OF AMERICA
Agenda
PPS Leases
defined
PPS Leases as
PMSIs
Registering PPS
Leases
The danger of
unregistered PPS
Leases
PPS Leases v
conventional
security
Questions
2
Security interests
PPS
Leases
Retention
of title
sales
Sales of
accounts
Charge
Mortgage
Security
interests
Bank
account
security
3
PPS leases defined
Lease or
bailment of
goods for …
More than one year, including any
holding over or renewal
• 90 days, for serial-numbered goods
OR
An indefinite term
BUT ONLY IF
Lessor/bailor is "regularly engaged in the business of
leasing/bailing goods
AND
Lessee/bailee provides value for the bailment
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PPS Lease examples
Lease of goods for
two years
Hire of car for 100
days
Aircraft / Vessel
leases or charters
Bailment of cars
by manufacturer
to dealer for sale
Lease of fittings in
conjunction with
lease of premises
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PPS Leases as purchase money
security interests ("PMSIs")
Unpaid rentals
loan
Company
PPS Lessor
Bank
General Security
Interest (GSI)
Lease of product for
two year term
(PMSI)
Lease (PMSI)
attaches to Products
GSI attaches to
Products
Leased
Products
ROT = retention of title sale
PMSI = purchase money security interest
Red = priority contest
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Four types of PMSIs
ROT sales
Purchase finance
(security interest taken by a person who
gives value to enable the grantor to acquire
collateral)
PMSIs
PPS leases
Commercial
consignments
7
Registering PPS
Leases
8
Key classes of collateral for registration
Tangible
property
General
property
Intangible
property
Financial
property
All present and
after-acquired
property
("Allpap")
Accounts
Investment
instruments
(eg shares)
Motor vehicles
Watercraft
Aircraft
General
intangibles
Agriculture
Other goods
All present and
after-acquired
property
except ("Allpape")
Intermediated
securities
(eg ASX-listed
shares)
The danger of unregistered leases
In re Maiden Civil (P&E) Pty Ltd [2013] NSWSC 852
Esanda/
Westpac
Security
for loan
to QES
QES Affiliate
Loan
Lessor /
Bailor
(QES)
Lease of
Caterpillar
vehicles
Lessee /
Bailee
(Maiden)
GSD
Loan
Fast
Financial
GSD = general security deed
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Unresolved conceptual issues
Leasing structures
Lender
Security
Lessor
PPS lease
Lessee
Does the Lender retain security over
the asset, or does it instead only get
security over the Lessor's rights under
the PPS lease (as proceeds)?
If the Lender does retain security over
the asset, does it need to re-register
against the Lessee?
The answer may turn in part on
whether the PPS lease constitutes a
"transfer" of the asset to the Lessee, at
least for PPSA purposes.
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This presentation material is intended to provide a summary of the subject
matter covered for training purposes only. It does not purport to be
comprehensive or to render legal advice. No reader should act on the basis of
any matter contained in this presentation without first obtaining specific
professional advice. 228783207
AUSTRALIA BELGIUM CHINA FRANCE GERMANY HONG KONG SAR INDONESIA (ASSOCIATED OFFICE) ITALY JAPAN
PAPUA NEW GUINEA SINGAPORE SPAIN SWEDEN UNITED ARAB EMIRATES UNITED KINGDOM UNITED STATES OF AMERICA
221808381